Question one
Ratio plays important role in analysing company’s performances, whether the company made improvement from previous year or to compare against other company similar industry. It also shows investor especially for creditors such as bank to know their financial performances.
From the question, the bank manager told that ABC Limited has too low working capital and too high gearing ratio. Working capital relates the company’s current assets and current liabilities. It measures the ability of the company to pay their current liabilities with their current assets. By this ratio, it also measures the liquidity of the company and bank is interested in this ratio. ABC Company is not doing well as their working capital is too low and will
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It clearly shows that Acer does not have very good inventory control compare to Dell and high risk that banks will not give loan. Investors or banks will be interested to know this ratios as a guaranteed for loans or funds given. The next ratio is assets turnover ratio which measures how efficient a company uses their assets to make sales. Acer has higher ratio of 1.73times compare to Dell which is 1.24times. It is important for the company to monitor their performance as creditor tends to know how well the company use their assets to produce the products. Acer and Dell are both in same industry, they are using almost same assets but in this case, Acer is more efficient compare to …show more content…
Acer has payable days of 69 days while Dell has 95 days to pay their debt. In this case it is recommended to pay debt in longer period of time so that the company will have more cash to survive. Acer will be at risk to have less cash and will affect their performance. Other ratio will be the receivable turnover ratio which Acer has 5.52times while Dell has 8.69times. Dell has higher turnover compare to Acer and Acer will be at risk because lower turnover will consider not so good performance by the investors and bank as it will lead to lower assets. The last ratio will be Acid Quick ratio, Acer has ratio of 0.94:1 while Dell 0.97:1. This shows Acer is slower in paying debts with current assets excluding inventory which is easily converted into
In this case, we can say that Amazon performance is a lot better than CanGo. A high Debt to Equity Ratio generally means that a company has been aggressive in financing its growth with debt. Debt can come in the form of stocks, bonds, and loans that the company borrowed against. Amazon current ratio is 1.31, but CanGo current ratio is 5.33. In general we can see that CanGo is performing better in this area compared with their main competitor Amazon, because this ratio shows that CanGo is capable of repaying its debts and liabilities than
Massachusetts Stove Company Strategic Options Introduction Massachusetts Stove Company is one of the last six remaining wood burning stove companies after recent changes implemented by the EPA. Even with the declining market for wood burning stoves, Massachusetts Stove Company has continued to steadily grow and profit for six straight years. Profitability Massachusetts Stove Company is the only stove company who sells their product via mail order which provides a niche market that other companies won’t be able to enter into. Massachusetts Stove Company also has the technology in their wood-burning stoves to distinguish their brand from the ever-shrinking list of wood burning stove manufacturers.
The inventory was sold and replaced 5.49 times in the year of 2013. This ratio is high. This means that the demand for the Dollarama’s products is high. This indicates that Dollarama Inc.’s performance in the fiscal year of 2013 is high. 5) Discuss the debt to equity ratio and what it says about how Dollarama finances its operations?
Sally’s Beauty Holding, Inc., who has a current ratio of 2.4, is quicker to turn their current asset into cash but also is not investing excess assets. Both companies are able to meet their debt obligations. On the other hand, Coty’s Inc. current liabilities exceeds their current assets revealing their current ratio to be .94. Having a ratio below one can imply that current assets are barely being covered by the current liabilities. Ulta Beauty’s debt-to-equity is estimated to be .65, which reveals Ulta Beauty to have a low risk and not using high amounts of debt to finance operations, because total liabilities is $1,001,660 and total shareholders’ equity is $1,550,218.
In return for lending the money, the firm need to pay the principal plus interest payment at some agreed time in the future. The most common debt
FCT v Applegate (1979) 9 ATR 899, is the ruling given by Australian courts regarding the residency of people for tax purposes who have a permanent residence abroad. Importantly it focused on the aspects of how people, who have gone overseas for employment or any other reason, will be taxed in Australia during their stay away, overseas (Thorpe, 2012). According to the Australian Tax laws, the residency of a person is determined by the status of their residence according to the ordinary concepts, their domicile, the 183 day test and the commonwealth superannuation fund test (Renton, 2005). This ruling primarily focuses on cases where the persons are ordinarily residing in Australia but, are not living here now and those people who are not residing
Gemini Electronics has become a successful electronics company that looks to be growing on an upward slope. We can see where Gemini is booming, as well as where they are lacking, by analyzing their Ratios and Statement of Cash Flow. Liquidity measures a firm’s ability to meet its cash obligations; shown by calculating the Current Ratio and the Quick Ratio. Gemini’s liquidity has slightly increased from 2008 to 2009, but remains below the industry average. An acceptable Current Ratio should be around 2:1, which Gemini has exceeded in 2008 (2.52:1) and 2009 (2.56:1).
Their current ratio is 1.4% (total current assets/total current liabilities). According to the Risk Management Association of Financial Ratio Benchmarks, the current average ratio is 1.5%. In 2014, the current ratio for the firm was 1.46% while the average ratio in the industry (NAICS 311330) was 1.6%. The company’s net property and equipment in 2015 is worth 2.6 million dollars, a slight increase from 2014, which was 2.3 million. The company is considering taking on some debt to increase their production capabilities.
This ratio will help the company create the level of stock price regarding its sales and revenues and in considering expenses and liabilities. Since Walmart is on
EXECUTIVE SUMMARY Black and Decker is a manufacturing company which produces power tools and accessories, household products, security hardware and outdoor products. B&D has a good ranking both in Europe and US, which is 19 and 7 respectively. The company has a really strong market position with their products in the “consumer” and “industrial” segment, contrarily to their inefficiency in the fastest growing segment, “tradesmen”, which their rivals are really strong at. Accordingly, company wants to increase their market share on this segment and establish recognition of their brand on the tradesmen segment.
It had better features than competitors like a 32GB memory or a 5-megapixel camera, but this wasn't the most important
COST STRUCTURE OF SAMSUNG Low cost structure of Samsung and high responsiveness to economic events has made Samsung more competitive. For example, initially Samsung focused more on volume and domination on market rather than increasing profitability. However, in 1990s, during the Asian financial crisis, Samsung cut costs and reemphasized product quality and manufacturing flexibility, which allowed its consumer electronics move from project phase to store shelves within next six months. Under the resources-based view of strategic management, effective resources available to a firm, as well as the competency of a firm is responsible in affecting competitive advantage received by a firm.
Skechers’s debt per equity ratio slightly decreased from the year 2012: from 0.462x to 0.443 which is an indicator that Skechers are keeping a close eye on debt and are trying to finance the company through equity and this is apparent when we look at the Skechers financial statements for the years 2012 and 2013 where equity increased at a higher amount than debt. When we compare Skechers’s ratio (0.443) to that of the Nike (0.721), we realize that it is much higher than Sketcher’s which might be that Nike is taking safe measures when it comes to financing themselves: which is through debt. But at the same time it is a very high and risky ratio. Equity Multiplier= Total Assets/ Total
The current ratio of the Ajinomoto Berhad is stable. It is because the high current ratio shows that there are many cash in the company. They have extra money to utilize in the other area. Besides, the quick ratio of the Ajinomoto Berhad is higher and it is good for the investor to invest. It means that the company has the ability to cover the current liabilities.